Eswar Prasad, former head of the IMF's Financial Studies Division, is Professor of Economics at Cornell University and a senior fellow at the Brookings Institution. He is the author of The Dollar Trap.

Comments

I agree with the author's point that rising inequality combined with corruption and political repression is bad for emerging economies and for growth. However, citing support for Anna Hazare's anti-corruption movement and the Arab spring as responses to economic inequality in the developing world is over-simplification. The two movements have emerged in response to very different problems, and within very different political contexts. One has resulted from frustration with corruption and has been expressed in an open political system, while the Arab spring was a response to political repression and had a different economic underpinning -- there, the problem was economies dependent on natural resources, an underdeveloped private sector, a growing large young educated population for which economies could not provide suitable opportunities leading to widespread unemployment. The former is in response to a specific problem, and the latter arose from discontent with the system at large. While I agree that inequality and corruption had a role to play in both cases, I disagree that popular discontent in these two movements was fundamentally similar and can be linked.

The author also suggests that tackling corruption will allow emerging markets to lock in growth and stability. Tackling corruption, while important, is not enough by itself to restore growth and reduce inequality. Growth in developing countries is slowing in response to global recessionary forces, and in some countries like India it is slowing because of an inability to reform fast enough. There is no disagreement that low-level and high-level corruption needs to be addressed, the argument now is what institutional arrangements can make this possible. Read more

I agree with the main theme of "growth is not enough" statement, that we need transparency, honesty and equality, but I do not understand why this would only concern emerging market countries?

Last year the protests, demonstrations sweeped the whole globe, and they are likely to continue this year too, probably even stronger than before.

Through the information we recieve each day we can see how much there is no real freedom and democracy even in the western societies, in the US we can learn how much it costs to buy the Presidency, in Europe the democratic principles have been openly thrown away in order to keep a false structure alive, the money the US "lost sight of" through the recent wars makes the Indian corruption look like peanuts, and we could continue the examples endlessly.

We need to see there are no different regions, dufferent cultures, governing systems, countries, nations, markets any more.

We are all tied up in the same network, we all carry the same burdens, the global crisis is exactly what the name says, it is global affecting all of us.

And the solution also has to be global, we all have to come out of our own subjective boxes and learn how to work together in a mutually responsible manner above all our differences, prejudice, rejections and misunderstandings.

Whether we like it or not we evolved into completely new existential conditions and we have to adapt to them.

We live in historic times, we are building a new humanity, which means a single, united network, optimally mutually working together for each other. Basically by this we find our way back to the harmonic natural living system model we were separated from by our growing ego thousands of years ago, but now in our new world we have to return to homeostasis despite, on top of our ego creating a very exciting, powerful, multi colored system with unlimited potential.Read more

Joschka Fischer
laments the fate of the European Union in the wake of the latest round of the Greek drama.

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